SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[X] Filed by the registrant
[ ] Filed by a party other than the registrant
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
- ------------------------------------------------------------------------------
Hatteras Income Securities, Inc.
- ------------------------------------------------------------------------------
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies.
- -----------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- ------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- ------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ------------------------------------------------------------------------------
Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
$125
- -------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
Schedule 14A
- -------------------------------------------------------------------------------
(3) Filing party:
NationsBank
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(4) Date filed:
April 17, 1996
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<PAGE>
(Hatteras Income Securities, Inc. logo)
HATTERAS INCOME SECURITIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 24, 1996
TO THE STOCKHOLDERS OF
HATTERAS INCOME SECURITIES, INC.
Notice is hereby given that the Annual Meeting (the "Annual Meeting") of
Stockholders of Hatteras Income Securities, Inc. (the "Company") will be held on
Friday, May 24, 1996 at 11:00 a.m. (Eastern time), at One NationsBank Plaza,
33rd Floor, Charlotte, North Carolina 28255, for the following purposes:
(1) To approve the removal of a fundamental investment restriction that
prohibits the Company from purchasing securities of other investment companies;
the purpose of removing the investment restriction is to permit the Company to
sweep available cash into money market funds of various investment companies on
an overnight basis;
(2) To elect three Directors of the Company;
(3) To ratify the selection by the Board of Directors of Price Waterhouse
LLP as independent public accountants of the Company for the fiscal year ending
December 31, 1996; and
(4) To transact such other business as may properly come before the Annual
Meeting, or any adjournment(s) thereof, including any adjournment(s) necessary
to obtain requisite quorums and/or approvals.
The Board of Directors of the Company has fixed the close of business on
March 15, 1996 as the record date for the determination of Stockholders entitled
to receive notice of and to vote at such Annual Meeting or any adjournment(s)
thereof. The enclosed Proxy Statement contains further information regarding the
meeting and the proposals to be considered. The enclosed Form of Proxy is
intended to permit you to vote even if you do not attend the meeting in person.
YOUR PROXY IS VERY IMPORTANT TO US. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING IN PERSON, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED FORM OF PROXY
TODAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. Signed but unmarked Forms of Proxy
will be counted in determining whether a quorum is present and will be voted in
favor of the proposals.
By Order of the Board of
Directors.
(Signature of Richard S. Szafran)
RICHARD S. SZAFRAN
SECRETARY
May 1, 1996
<PAGE>
YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS
OF THE NUMBER OF SHARES THAT YOU OWN.
PLEASE MARK, SIGN, DATE AND RETURN YOUR
FORM OF PROXY IMMEDIATELY.
SHARES OF THE COMPANY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR ISSUED,
ENDORSED OR GUARANTEED BY, NATIONSBANK, N.A. ("NATIONSBANK") OR ANY OF ITS
AFFILIATES. SUCH SHARES ARE NOT INSURED BY THE U.S. GOVERNMENT, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY. AN INVESTMENT IN THE COMPANY INVOLVES CERTAIN RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL.
NATIONSBANK AFFILIATES PROVIDE INVESTMENT ADVISORY AND CERTAIN OTHER
SERVICES TO THE COMPANY, FOR WHICH THEY ARE COMPENSATED.
<PAGE>
HATTERAS INCOME SECURITIES, INC.
One NationsBank Plaza
Charlotte, North Carolina 28255
(800) 851-9677
PROXY STATEMENT
Annual Meeting of Stockholders
May 24, 1996
This Proxy Statement is being furnished to holders of common stock
("Stockholders") of Hatteras Income Securities, Inc. (the "Company") in
connection with the solicitation by the Board of Directors of the Company of
proxies to be used at the Annual Meeting of Stockholders (the "Annual Meeting")
of the Company to be held on May 24, 1996 at 11:00 a.m. (Eastern time) at One
NationsBank Plaza, 33rd Floor, Charlotte, North Carolina 28255, and at any
adjournment(s) thereof. Your proxy is being solicited for the purposes set forth
in the accompanying Notice of Annual Meeting.
The Board of Directors has fixed March 15, 1996 (the "Record Date") as the
date for the determination of Stockholders entitled to receive notice of and to
vote at such Annual Meeting, and, accordingly, only Stockholders of record at
the close of business on that date will be entitled to notice of and to vote at
such Annual Meeting. As of the Record Date, there were 3,345,527 outstanding
shares of common stock of the Company. This Proxy Statement is first being
mailed to Stockholders on or about May 1, 1996.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL
AND SEMI-ANNUAL REPORTS TO ANY STOCKHOLDER UPON WRITTEN OR ORAL REQUEST MADE TO
THE ADDRESS OR TOLL-FREE TELEPHONE NUMBER ABOVE.
All actions of the Board of Directors of the Company described in the
proposals below were unanimously approved by the Board, none of whom are
"interested persons" (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Company, NationsBanc Advisors, Inc. ("NBAI"),
the Company's investment adviser, or TradeStreet Investment Associates, Inc.
("TradeStreet"), the Company's investment sub-adviser.
PROPOSAL 1: REMOVAL OF FUNDAMENTAL INVESTMENT RESTRICTION
At the Annual Meeting, the Stockholders of the Company will be asked to
approve the removal of a fundamental investment restriction that prohibits the
Company from purchasing securities of other investment companies except by
acquisition of such securities as part of a merger, consolidation,
reorganization or purchase of assets approved by the Company's shareholders (the
"Investment Restriction"). The Company currently is contemplating sweeping
available cash of the Company into money market funds of various investment
companies (the "Overnight Sweep Program") on an overnight basis in order to
generate income with such available cash. The Overnight Sweep Program, which the
Board of Directors believes will significantly supplement the Company's
short-term cash management activities, is currently prohibited by the Investment
Restriction. Accordingly, the Board of Directors has approved the removal of the
Investment Restriction.
<PAGE>
Because the Investment Restriction is fundamental, the Board is now seeking the
approval of the Stockholders of the Company to remove the Investment
Restriction.
In conjunction with the foregoing proposal, the Board of Directors has also
approved two new investment policies which are non-fundamental and therefore do
not require the approval of the Stockholders of the Company. First, it has
authorized the Company to invest in money market instruments, which may include,
without limitation: securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities; obligations of banks subject to regulation by
the U.S. Government and having total assets of $1 billion or more; Eurodollar
certificates of deposits; obligations of savings banks and savings and loan
associations having total assets of $1 billion or more; fully insured
certificates of deposit; and commercial paper rated within the highest grade by
Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Corporation
("S&P") or, if not rated, issued by a company having an outstanding long-term
debt issue rated AAA by S&P or Aaa by Moody's. Second, the Board has expressly
authorized the Company to purchase securities issued by other investment
companies, to the extent that such investments are consistent with the Company's
investment objectives and policies and permissible under the 1940 Act. The 1940
Act prohibits an investment company from owning (i) more than three percent of
the total outstanding voting stock of another investment company, (ii)
securities issued by another investment company having a value in excess of five
percent of the value of the total assets of the acquiring investment company, or
(iii) securities issued by other investment companies having, in aggregate, a
value in excess of ten percent of the total assets of the acquiring investment
company. The net effect of these two new investment policies, in combination
with the removal of the Investment Restriction, is to facilitate the Company's
entering into the Overnight Sweep Program.
As a shareholder in a money market fund of another investment company, the
Company would bear, along with other shareholders, its pro rata portion of such
other investment company's expenses, including advisory fees. These expenses
would be in addition to the advisory and other expenses that the Company bears
directly in connection with its own operations. There can be no assurance that
any investment company money market fund in which the Company invests will be
able to preserve principal or provide current income. However, investment
company money market funds are subject to restrictions under the 1940 Act
designed to enhance their ability to preserve capital and maintain liquidity
and, accordingly, are among the safest forms of investment company securities
available.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO APPROVE THE
REMOVAL OF THE INVESTMENT RESTRICTION.
PROPOSAL 2: ELECTION OF DIRECTORS
At the Annual Meeting, the Stockholders of the Company will be asked to
vote for the three nominees for Director listed below (the "Nominees"). Voting
for the Nominees is not cumulative. Each Director will serve until the next
Annual Meeting or until his successor shall be elected and shall qualify. Each
Nominee is currently a member of the Board of Directors and has consented to his
nomination and to serve if elected. Although the Board of Directors expects that
each of the Nominees will be available for election, in the event a vacancy in
the slate of Nominees is occasioned by death or other unexpected occurrence, it
is intended that shares represented by proxies in the accompanying form will be
voted for the election of a substitute Nominee selected by the persons named in
the proxy. Directors will be elected by a plurality of the votes cast.
2
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO ELECT EACH
OF THE NOMINEES.
THE BOARD OF DIRECTORS
Information regarding each member of the Board of Directors is as follows:
WILLIAM H. GRIGG, age 63, Chairman and Chief Executive Officer, Duke Power
Co., Charlotte, North Carolina, a public utility, since April 1994. Mr. Grigg
was Vice Chairman of Duke Power Co. from November 1991 to April 1994, and
Executive Vice President -- Customer Group of Duke Power Co. from April 1988 to
November 1991. He has been a Director of the Company since March 1980. Mr. Grigg
is also a director of Duke Power Co., Nations Government Income Term Trust 2003,
Inc., Nations Government Income Term Trust 2004, Inc., Nations Balanced Target
Maturity Fund, Inc., Nations Institutional Reserves, Nations Fund Trust, Nations
Fund, Inc. and Nations Fund Portfolios, Inc.
THOMAS F. KELLER, age 64, R. J. Reynolds Industries Professor of Business
Administration and Dean, Fuqua School of Business, Duke University, Durham,
North Carolina, since 1974. He has been a Director of the Company since March
1985. Mr. Keller is also a director of LADD Furniture, Inc., Mentor Growth Fund,
Wendy's International, Inc., Cambridge Investment Trust, American Business
Products, Inc., Monk-Austin, Inc., Nations Government Income Term Trust 2003,
Inc., Nations Government Income Term Trust 2004, Inc., Nations Balanced Target
Maturity Fund, Inc., Nations Institutional Reserves, Nations Fund Trust, Nations
Fund, Inc. and Nations Fund Portfolios, Inc.
A. MAX WALKER, age 73, independent Financial Consultant since May 1987.
From April 1982 through May 1987, Mr. Walker was Vice President of Merrill
Lynch, Pierce, Fenner & Smith, Inc. He has been a Director of the Company since
the Company was organized in February 1973. Mr. Walker is also Chairman of the
Board of Nations Government Income Term Trust 2003, Inc., Nations Government
Income Term Trust 2004, Inc., Nations Balanced Target Maturity Fund, Inc.,
Nations Institutional Reserves, Nations Fund Trust, Nations Fund, Inc. and
Nations Fund Portfolios, Inc.
None of the Nominees owns, either directly or indirectly, more than 1% of
the capital stock of the Company. No Nominee has been, during the past five
years, an officer, employee, director, general partner or shareholder, of NBAI,
the Company's investment adviser, or TradeStreet, the Company's investment sub-
adviser, owned any securities or had any other material direct or indirect
interest in NBAI or any of its affiliates. None of the Nominees has had, since
the beginning of the current fiscal year, a material direct or indirect interest
in any material transactions or proposed material transactions to which NBAI,
TradeStreet or any affiliate thereof was or is to be a party, other than a
transaction involving an investment company in the Company's "Fund Complex", as
that term is defined under Rule 14a-101 of the Securities Exchange Act of 1934,
as amended (the "1934 Act"). No Nominee is a party adverse, or has a material
interest adverse, to the Company or any affiliates thereof in connection with
any material pending legal proceedings. Since the beginning of the current
fiscal year, none of the Nominees has engaged in any transactions to which the
Company was a party or been indebted to the Company. Some of the Nominees and
their affiliates have been customers of NationsBank, an affiliate of NBAI. All
extensions of credit to such persons have been made in the ordinary course of
business on substantially the same terms, including interest rates and
collateral, as those prevailing in comparable transactions with others, and did
not involve more than the normal risk of collectability or present other
unfavorable features. Based solely on its review of copies of Forms 3 and 4 and
amendments thereto and
3
<PAGE>
Forms 5 received by it, or written representations from certain reporting
persons that no such Forms were required from such persons, the Company believes
that, during the fiscal year ended December 31, 1995, it complied with all
filing requirements applicable to its officers, directors and, if any,
greater-than-ten-percent beneficial owners.
COMMITTEES OF DIRECTORS
The Board of Directors meets regularly once each quarter at an in-person
meeting and may have special meetings. The Board held four regular meetings
during the fiscal year ended December 31, 1995. In addition, the Board has an
Audit Committee and a Nominating Committee. Both Committees are composed of all
three incumbent members of the Board of Directors. The function of the Audit
Committee is to (i) review the audit procedures and methods of keeping records
followed by the Company to ensure that the procedures and methods are sufficient
in scope and detail to permit proper and sound practices, (ii) review and
approve stockholder reports prior to delivery to Stockholders, (iii) nominate
the independent public accountants to be engaged by the Company, subject to the
approval of the Board of Directors and ratification by the Stockholders, and
(iv) review with the independent public accountants the proposed scope of the
annual audit, the results of their examination, the financial statements and
their opinion thereon. Thomas F. Keller is Chairman of the Audit Committee. The
Audit Committee met once during the year ended December 31, 1995. The function
of the Nominating Committee is to review information assembled for the purpose
of selecting candidates for nomination to membership on the Board and to
recommend nominees for election as directors. The Nominating Committee will
consider nominees recommended by Stockholders, in writing, that are submitted to
the Secretary of the Company. William H. Grigg is Chairman of the Nominating
Committee. The Nominating Committee did not hold a meeting during the fiscal
year ended December 31, 1995. The Board has no standing compensation committee
or committee performing a similar function. In 1995, each Director attended at
least 75% of the regular meetings of the Board and, as appropriate, meetings of
the committees of the Board.
4
<PAGE>
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
The Executive Officers and Significant Employees of the Company and their
principal occupations for at least the last five years and their other
affiliations are set forth below.
<TABLE>
<S> <C>
MARK H. WILLIAMSON, President President and Chief Executive Officer, NationsBanc Advisors, Inc. since
1995; Senior Vice President, NationsBank, N.A. since 1990; President,
NationsBank Discount Brokerage, Inc.; President, Nations Government
Income Term Trust 2003, Inc., Nations Government Income Term Trust 2004,
Inc. and Nations Balanced Target Maturity Fund, Inc.
RICHARD S. SZAFRAN, Vice President, NationsBanc Advisors, Inc. since 1995; Vice President,
Secretary/Treasurer NationsBank, N.A. 1993-1995; Assistant Vice President, The Boston
Company 1987-1993; Secretary/Treasurer, Nations Government Income Term
Trust 2003, Inc., Nations Government Income Term Trust 2004, Inc. and
Nations Balanced Target Maturity Fund, Inc.
MARK S. AHNRUD, CFA Director of Fixed Income Management, TradeStreet Investment Associates,
Assistant Secretary and Inc. since 1995; Vice President, NationsBank, N.A. 1991-1995; Senior
Portfolio Manager Fixed Income Portfolio Manager and holder of Chartered Financial Analyst
designation.
</TABLE>
5
<PAGE>
COMPENSATION OF MANAGEMENT
The following table shows compensation paid by the Company and the Fund
Complex to the Directors of the Company for the fiscal year ended December 31,
1995. Officers of the Company are employed by the Company's investment adviser
or sub-adviser and receive no compensation or reimbursements from the Company.
COMPENSATION TABLE
<TABLE>
<CAPTION>
NAME OF PERSON, AGGREGATE COMPENSATION TOTAL COMPENSATION FROM COMPANY
POSITION FROM COMPANY(1) AND FUND COMPLEX PAID TO DIRECTORS(2)
<S> <C> <C>
William H. Grigg $ 7,000 $57,500(3)
Director
Thomas F. Keller $ 7,000 $59,500(4)
Director
A. Max Walker $ 11,000 $75,875
Chairman
</TABLE>
1 The Company pays the Chairman of the Board $11,000 per year and each Director
$7,000 per year and reimburses each for travel and other out-of-pocket
disbursements incurred in connection with attending meetings.
2 The Fund Complex consists of seven registered investment companies in addition
to the Company.
3 Includes $40,500 deferred compensation.
4 Includes $42,500 deferred compensation.
RETIREMENT PLAN
Under the terms of the Nations Fund Retirement Plan for Eligible Directors
(the "Retirement Plan"), each Director may be entitled to certain benefits upon
retirement from the Board of Directors of one or more of the open-end investment
companies (the "Funds") in the Company's Fund Complex. Pursuant to the
Retirement Plan, the normal retirement date is the date on which an eligible
director has attained age 65 and has completed at least five years of continuous
service with one or more of the Funds. If a Director retires before reaching age
65, no benefits are payable. Each eligible director is entitled to receive an
annual benefit from the Funds equal to 5% of the aggregate directors' fees
payable by the Funds during the calendar year in which such director's
retirement occurs multiplied by the number of years of service (not in excess of
ten years of service) completed with respect to any of the Funds. Such benefit
is payable to each eligible director in quarterly installments for a period of
no more than five years. If an eligible director dies after attaining age 65,
such director's surviving spouse (if any) will be entitled to receive 50% of the
benefits that would have been paid (or would have continued to have been paid)
to the director if he had not died. The Retirement Plan is unfunded. The
benefits owed to each director are unsecured and subject to the general
creditors of the Funds. Each Director of the Company is a participant in the
Retirement Plan. Messrs. Grigg, Keller and Walker have 5, 4, and 10 years of
credited service, respectively, with the Funds.
6
<PAGE>
ESTIMATED ANNUAL RETIREMENT BENEFITS TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
REMUNERATION 5 10
<S> <C> <C>
$ 25,000 $ 6,250 $12,500
50,000 12,500 25,000
75,000 18,750 37,500
100,000 25,000 50,000
</TABLE>
PROPOSAL 3: RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of its Audit Committee, has
selected Price Waterhouse LLP ("Price Waterhouse"), which has served as
independent public accountants of the Company since 1994, as independent public
accountants of the Company to examine the financial statements of the Company
for its fiscal year ending December 31, 1996, and to report thereon to the Board
and the Stockholders. If more shares of the Company's capital stock represented
at the meeting are voted against ratification of the selection of Price
Waterhouse than for ratification, the selection of auditors may be reconsidered
by the Audit Committee and the Board of Directors. To the best knowledge of
management, the firm of Price Waterhouse has no direct or material indirect
financial interest in the Company. Price Waterhouse acts as the independent
public accountants for the other investment companies in the Company's Fund
Complex. Price Waterhouse also acts as the independent public accountants for
affiliates of NBAI, including NationsBank, N.A. and NationsBank Corporation. If
the Company receives, at least five business days before the Annual Meeting, any
written request from one or more Stockholders to have representatives of Price
Waterhouse present at the Annual Meeting to respond to appropriate questions
from Stockholders, the Company will arrange to have such representatives present
and provide them with an opportunity to make a statement if they so desire.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO RATIFY THE
SELECTION OF PRICE WATERHOUSE.
ADDITIONAL INFORMATION
PROCEDURAL MATTERS
Each Stockholder of the Company will be entitled to one non-cumulative vote
for each share and a fractional non-cumulative vote for each fractional share.
As of the Record Date, there were 3,345,527 outstanding shares of the Company.
Shareholders holding a majority of the aggregate outstanding shares of the
Company at the close of business on the Record Date will constitute a quorum for
the approval of each of the proposals described in the accompanying Notice of
Annual Meeting and in this Proxy Statement. The three proposals described above
have differing thresholds for Stockholder approval. With respect to the proposal
to remove the Investment Restriction, such proposal must be approved by the
lesser of (a) sixty-seven percent (67%) or more of the Company's outstanding
shares present at a meeting of the Company's Stockholders, if more than fifty
percent (50%) of the Company's outstanding shares are present in person or by
proxy, or (b) more than fifty percent (50%) of the outstanding shares of the
Company. With respect to the proposal relating to the election of Directors,
Directors will be elected by a plurality of the voters cast. Finally, the
proposal to ratify
7
<PAGE>
the selection of Price Waterhouse as independent public accountants of the
Company will be approved if more votes are cast in favor of the proposal than
against. Stockholders are not entitled to rights of appraisal or similar rights
of dissenters with respect to any matter to be acted upon at the Annual Meeting.
Any form of proxy which is properly executed and received in time to be
voted at the Annual Meeting will be counted in determining whether a quorum is
present and will be voted in accordance with the instructions marked thereon. In
the absence of instructions, any such form of proxy will be voted in favor of
(i) approving the removal of the fundamental investment restriction prohibiting
the Company from purchasing securities of other investment companies; (ii)
electing as Directors of the Company the three Nominees named in the Proxy
Statement for the terms indicated; and (iii) ratifying the selection of Price
Waterhouse as independent public accountants of the Company for the fiscal year
ending December 31, 1996. Abstentions and "broker non-votes" (I.E., proxies from
brokers or nominees indicating that such persons have not received instructions
from the beneficial owners or other persons entitled to vote shares as to a
particular matter with respect to which the brokers or nominees do not have
discretionary power to vote) will be counted solely for purposes of determining
whether a quorum is present and otherwise will not be counted for or against any
proxy to which they relate. Abstentions and broker non-votes will have no
effect, either for or against, on any of the proposals.
If, by the time scheduled for the Annual Meeting, a quorum is not present,
or if a quorum is present but sufficient votes in favor of any of the proposals
are not received, the persons named as proxies may move for one or more
adjournments of the Annual Meeting to permit further solicitation of proxies
with respect to any of the proposals. Any such adjournment(s) will require that
more shares present in person or by proxy at the session of the Annual Meeting
to be adjourned be voted in favor of adjournment than against. The persons named
as proxies will vote in favor of such adjournment(s) those shares which they are
entitled to vote which have voted in favor of such proposals. They will vote
against any such adjournment(s) those proxies required to be voted against such
proposals.
The duly appointed proxies may, in their discretion, vote upon such other
matters as may come before the Annual Meeting or any adjournment(s) thereof,
including any proposal to adjourn a meeting at which a quorum is present to
permit the continued solicitation of proxies in favor of the proposals. A
Stockholder of the Company may revoke his or her proxy at any time prior to its
exercise by delivering written notice of revocation or by executing and
delivering a later-dated form of proxy to the Secretary of the Company, at the
address set forth on the cover page of this Proxy Statement, or by attending the
Annual Meeting in person to vote the shares held by such Stockholder.
Signed but unmarked forms of proxy will be counted in determining whether a
quorum is present and will be voted IN FAVOR of each of the proposals.
SOLICITATION OF PROXIES AND PAYMENT OF EXPENSES
The cost of soliciting proxies for the Annual Meeting, consisting
principally of expenses incurred in preparing, printing and mailing proxy
materials, together with the costs of any supplementary solicitation and proxy
soliciting services provided by third parties, will be borne by the Company. In
following up the original solicitation of the proxies by mail, the Company may
request brokers and others to send forms of proxy and proxy materials to the
beneficial owners of the stock and may reimburse them for their reasonable
expenses in so doing. Proxies will be solicited in the initial, and any
supplemental, solicitation by mail and may be solicited
8
<PAGE>
in person, by telephone, telegraph, telefacsimile, or other electronic means by
officers of the Company, personnel of NBAI or an agent of the Company.
Compensation for such services will be paid by the Company or NBAI, except that
officers or employees of the Company will not be compensated for performing such
services.
SUBSTANTIAL SHAREHOLDERS
As of the close of business on the Record Date, there were no persons known
to the Company to be beneficial owners of 5% or more of the outstanding shares
of the Company.
ADDITIONAL INFORMATION
The Company, with principal executive offices located at One NationsBank
Plaza, Charlotte, North Carolina 28255, is subject to the informational
requirements of the 1934 Act and the 1940 Act, and in accordance therewith files
reports, proxy materials and other information with the SEC. Such reports, proxy
materials and other information may be inspected and copied at the public
reference facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of such materials can be obtained from the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
NBAI and TradeStreet, both located at One NationsBank Plaza, Charlotte,
North Carolina 28255, are the investment adviser and the investment sub-adviser,
respectively, of the Company.
FUTURE SHAREHOLDER PROPOSALS
In the event any Stockholder wishes to present a proposal to Stockholders
of the Company for inclusion in the Proxy Statement and form of proxy relating
to the 1997 Annual Meeting of Stockholders, such proposal must be received by
the Company on or before November 17, 1996.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented
for consideration at the Annual Meeting. However, if other matters are properly
presented to the Annual Meeting, it is the intention of the proxy holders named
in the accompanying form of proxy to vote the proxies in accordance with their
best judgment.
9
*******************************************************************************
APPENDIX
PROXY CARD
HATTERAS INCOME SECURITIES, INC.
Annual Meeting of Stockholders
May 24, 1996
The undersigned hereby appoints Richard S. Szafran (the "Proxy")
attorney and proxy of the undersigned, with power of substitution and
resubstitution, to attend, vote and act for the undersigned at the Annual
Meeting of Stockholders of Hatteras Income Securities, Inc. (the "Company") to
be held at One NationsBank Plaza, 33rd Floor, Charlotte, North Carolina 28255,
at 10:00 a.m. (Eastern time) on Friday, May 24, 1996, and at any adjournment(s)
thereof. The Proxy shall cast votes according to the number of shares of the
Company which the undersigned may be entitled to vote with respect to the
proposals set forth on the reverse side of this proxy card, in accordance with
the specification indicated, if any, and shall have all the powers which the
undersigned would possess if personally present. The undersigned hereby revokes
any prior proxy to vote at such meeting, and hereby ratifies and confirms all
that said attorney and Proxy may lawfully do by virtue hereof or thereof.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS ON BEHALF OF THE
COMPANY. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS OF THE COMPANY AND THE PROXY STATEMENT, DATED MAY 1,
1996.
THIS PROXY WILL BE VOTED AS SPECIFIED HEREON WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION, THIS
PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS.
(Continued on other side)
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Please vote by filling in the appropriate box below, as shown, using blue or
black ink or dark pencil. Do not use red ink. [ ]
(1) Proposal to remove the investment restriction prohibiting the Company from
purchasing securities of other investment companies.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
(2) ELECTION OF DIRECTOR FOR WITHHOLD AUTHORITY
Nominees:
William H. Grigg [ ] [ ]
Thomas F. Keller [ ] [ ]
A. Max Walker [ ] [ ]
(3) Proposal to ratify the selection of Price Waterhouse LLP as the independent
public accountants of the Company.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In his discretion, the named Proxy is authorized to vote upon any other
business that may properly come before the meeting, including matters incident
to the conduct of the meeting, or any adjournment(s), thereof, including any
adjournment(s) necessary to obtain requisite quorums and/or approvals.
____________________________________, 1996
(Please Date)
Please sign below exactly as your name(s)
appear(s) hereon. Corporate proxies should be
signed in full corporate name by an authorized
officer. Each joint owner should sign
personally. Fiduciaries should give full titles
as such.
Signature(s)
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